Five states have no statewide sales tax

Alaska, Delaware, Montana, New Hampshire, and Oregon do not charge a statewide sales tax. If you live in or move to one of these states, you will not pay sales tax on most purchases at the register. However, "no sales tax" does not mean tax-free shopping everywhere — some of these states tax specific items, and local taxes may still apply depending on where you are.

The absence of a statewide sales tax does not mean these states collect no tax revenue. Most fund state services through income tax, property tax, business tax, or a combination of those sources. Understanding which taxes your state uses matters for budgeting, especially if you are relocating or comparing the true cost of living between states.

Key Takeaways

  • Alaska, Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax, though some allow local sales taxes in certain areas.
  • Alaska taxes only a few items like alcohol and tobacco; most goods are not taxed at the state level.
  • Montana and Oregon tax groceries in some circumstances or not at all, which affects your food budget differently than states with broad sales taxes.
  • New Hampshire and Delaware have no sales tax and no income tax, making them lower-tax states overall.
  • Local jurisdictions in some no-sales-tax states still collect their own sales taxes, so your actual tax burden depends on your city or county.

Alaska: No sales tax, but alcohol and tobacco are taxed

Alaska has no statewide sales tax on general merchandise. However, the state does tax alcohol and tobacco products at the point of sale. Some municipalities in Alaska — including Anchorage, Juneau, and Fairbanks — impose their own local sales taxes ranging from 0% to 7.5%, depending on the city.

If you live in an Alaskan city with a local sales tax, you will pay that tax on most purchases, including groceries and clothing. If you live in an unincorporated area or a municipality without a local tax, you pay no sales tax on those items. Check your specific city or borough to know what rate applies where you live.

Delaware: No sales tax and no income tax

Delaware has neither a statewide sales tax nor a statewide income tax, making it one of the lowest-tax states in the country. This applies to all purchases — groceries, clothing, electronics, and services are all tax-free at the register.

Delaware does collect revenue through property tax, business tax, and corporate income tax. If you own a home or run a business in Delaware, you will pay those taxes. But as a consumer buying goods, you will not see sales tax added to your receipt.

Montana: No sales tax, but groceries may be taxed locally

Montana has no statewide sales tax on any goods, including groceries and clothing. However, some counties and cities in Montana allow local option sales taxes, which means certain jurisdictions can impose their own tax on purchases. These local taxes vary by location and may apply to groceries, prepared food, or all retail goods.

Before moving to or shopping in Montana, check whether your county or city has a local sales tax. The state itself will not tax your purchase, but your locality might. Contact your county assessor's office or city government to find out what rate, if any, applies in your area.

New Hampshire: No sales tax and no income tax

New Hampshire has no statewide sales tax and no income tax on wages or investment income. Groceries, clothing, and most goods are not taxed when you buy them. New Hampshire does tax meals at restaurants and prepared food, which is sometimes called a "meals and rooms tax."

New Hampshire funds state services through property tax, business tax, and the meals and rooms tax. If you eat out frequently, you will pay tax on those meals. If you buy groceries and cook at home, those purchases are not taxed.

Oregon: No sales tax, but income tax is higher

Oregon has no statewide sales tax on any purchase — groceries, clothing, and services are all tax-free at the register. This is one of the broadest no-sales-tax policies in the country. However, Oregon makes up that revenue through income tax, which is higher than the national average. Oregon's income tax rates range from 4.75% to 9.9% depending on your income bracket.

If you live in Oregon and earn wages or have investment income, you will file a state income tax return. The tradeoff is that you pay no sales tax on purchases. For people with low incomes or those who spend heavily on goods, the lack of sales tax can be a significant benefit. For high earners, the income tax burden may offset that advantage.

Local sales taxes in no-sales-tax states

Even though these five states have no statewide sales tax, some allow cities and counties to impose their own local sales taxes. This means your actual tax burden depends on where you live within the state, not just which state you live in.

Alaska and Montana are the most common examples. In Alaska, Anchorage residents pay local sales tax, but residents of other areas may not. In Montana, some counties have opted into local sales taxes while others have not. Before assuming you will pay no sales tax, confirm your specific city or county's rules. You can contact your local tax assessor or city government office to find out what applies where you are.

Frequently Asked Questions

Do I pay sales tax on groceries in these states?

In most of these states, groceries are not taxed. Alaska, Delaware, New Hampshire, and Oregon do not tax groceries at the state level. Montana does not either, though some local jurisdictions may. New Hampshire taxes prepared food and restaurant meals, but not groceries you buy to cook at home.

If I move to a no-sales-tax state, will I pay less in taxes overall?

Not necessarily. States without sales tax often use income tax, property tax, or both to fund services. New Hampshire and Delaware have no income tax, so you may pay less overall. Oregon has no sales tax but high income tax, so your total tax burden depends on your income and spending habits. Compare all taxes, not just sales tax, when deciding.

Can I order online from a no-sales-tax state and avoid sales tax?

No. Most online retailers now collect sales tax based on where the item is being shipped, not where the company is located. If you live in a state with sales tax and order from an Oregon company, you will still pay your state's sales tax. Living in a no-sales-tax state means you do not pay sales tax on purchases made within that state.

Do these states tax services like haircuts or car repairs?

Most do not tax services at the state level. However, some local jurisdictions in Alaska and Montana may tax certain services. New Hampshire taxes some services but not others. Check your specific location's rules if you are unsure whether a particular service is taxed.